On being asked about Apple’s proposal to sell used phones in India, the government official cited above said: “No way.”

ET Bureau

May 17, 2016, 08:43 IST

KOLKATA | NEW DELHI: Apple Chief Executive Officer Tim Cook is set to meet Prime Minister Narendra Modi this week during his trip to India, which has emerged as a key market for the iPhone maker as it looks to stem a slump in sales. It’s the first time he’ll be visiting the country since taking over from the late Steve Jobs in 2011.

Apple India spokesperson Anand Bhaskaran confirmed that Cook will be coming to India from China — he’s been to that country eight times since becoming CEO — on the second leg of his Asia trip but declined to give details of his itinerary.

Cook is likely to land in India late on Tuesday and meet Modi on Saturday, people with knowledge of this said, adding that the Apple CEO’s visit will probably last for most of this week.

Cook’s visit will put the spotlight firmly on India, a market which attracted Apple’s focus only about two years ago. It also makes him less of the odd man out — the bosses at Facebook, Amazon, Google and Microsoft have paid multiple visits to the country.

His meetings in India will include one with Bharti Airtel Chairman Sunil Mittal, besides top industry executives, employees and trade partners, sources said. He is also expected to meet senior officials from Reliance Industries.

India will try and persuade Apple to invest in smartphone and computer manufacturing facilities in the country, in line with the government’s ‘Make in India’ campaign, said a senior government official.

“However, Apple’s manufacturing plans in India are unlikely to be frozen during this visit since the company feels the country still does not have the critical mass to support local manufacturing right now. The project though is on the cards,” said one of those cited above.

Apple’s contract maker Foxconn is expanding its manufacturing capacity in India and is already building devices for companies such as China’s Xiaomi.

Apple cofounder Jobs, who didn’t consider India a significant market for the company’s iconic products, nevertheless derived spiritual inspiration from the country, having travelled through it in the 1970s. He even encouraged Facebook founder Mark Zuckerberg to visit India when he hit a rough patch.

Cook, 55, took charge of Apple in August 2011, having been chosen to take over by Jobs after the latter was diagnosed with pancreatic cancer.

An MBA from Duke University and Bachelor of Science in industrial engineering from Auburn University, Cook was then the company’s chief operating officer responsible for Apple’s worldwide sales and operations, including the Mac business.

One of the items on Cook’s agenda during his India visit is the possibility of tapping into India’s startup ecosystem. According to a person familiar with discussions, Apple is exploring a number of options, including an accelerator programme of sorts for local startups.

The person said talks are at a “very initial stage”. Another person said the trip will see Cook finalising plans for company-owned Apple stores, formal approval for which may be given by the government during his visit.

He may also announce the company’s involvement with some flagship social projects of the government where products and services such as digital wallet Apple Pay could play a role, the executives said.

Apple has been working on Cook’s India itinerary for about a month.

LONE BRIGHT SPOT The visit comes just over two weeks after India emerged as the lone bright spot amid the first quarterly sales decline for the company in 13 years.

Cook said then that he expects things to get even better in India once high-speed 4G networks gain traction across the country.

While global iPhone sales fell for the first time in the January-March quarter, they rose 56% in India during the same quarter from the year earlier.

Cook had also said that while India is the third-largest smartphone market, right now it’s where China was at about 7-10 years back and hence offers great opportunity.

India is the fastest-growing smartphone market in the world and is widely expected to surpass the US to become the second-largest in 2017. Apple is engaged in a close battle with Samsung in the country for the leadership position in the over- Rs 30,000 price segment.

While China is currently Apple’s second-largest market after the US, the company is focussed on attracting firsttime users in emerging markets such as India amid signs of tapering in developed ones. In line with this, Apple has extended its reach in the country in the past two years to four distributors from two earlier, and has applied to set up its own retail stories as well in the country as mentioned above.

Efforts for a broader presence faced a setback when its application to be allowed to sell company certified second-hand phones was turned down by India, citing the objection against allowing the import and sale of such devices to prevent dumping of electronic waste. That stance is unlikely to change.

On being asked about Apple’s proposal to sell used phones in India, the government official cited above said: “No way.”

India is among Apple’s fastest-growing markets and increasingly important from that perspective, said Jaideep Mehta, managing director, India and South Asia, IDC.

“Apple’s keen to get going with Apple retail, and Cook’s probably looking at engaging with the government to get that going during his visit here,” he said. “India is the big battleground for Apple’s competitors for tomorrow, so he wants to see firsthand the market scenario and the competitive landscape.”

He may also meet technology partners that work with Apple, Mehta said.

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Tim Cook's maiden visit to India: What's on the menu

Tim Cook's maiden visit to India: What's on the menu

Apple CEO Tim Cook is set to meet PM Narendra Modi this week during his trip to India.

He will be visiting the country for the first time since taking over from late Steve Jobs in 2011.

2 of 6

Jobs never considered India significant market

Jobs never considered India a significant market for the company's iconic products, but for Tim Cook this is the country Apple cannot afford to ignore.

India was a lone bright spot as Apple reported its first quarterly sales decline in 13 years. Cook expects things to get even better once high-speed 4G networks gain traction across the country.

While global iPhone sales fell for the first time, they rose 56% in India in the January-March quarter from the year earlier.

3 of 6

India is the third largest smartphone market

India's top telcos Bharti Airtel, Vodafone India and Idea Cellular are extending 4G networks across the country ahead of the commercial launch of such services by Reliance Jio Infocomm.

The optimism on India contrasts with prospects elsewhere. Revenue in China and the Asia-Pacific region took a hit, with Apple forecasting another disappointing quarter.

While India is the third largest smartphone market, right now it's where China was at about seven to 10 years back and hence offers great opportunity, Cook said.

4 of 6

Apple’s distribution reach in India has doubled

Incidentally, Apple recently decided to restore parity in pricing by reducing online discounts that had annoyed brick-and-mortar stores, several of which had slashed their iPhone stock.

Apple's distribution reach in India has doubled in the last two years with four distributors versus two earlier, industry executives said.

Counterpoint Research said iPhone sales in the January-March period in India hit a record 630,000 units and the market tracker now forecasts they will rise to 3 million in the calendar year, compared with just over 2 million in 2015.

Jio’s Rs 2,399 annual plan offers 2GB per day data that costs effectively Rs 200 per month. It also offers unlimited voice and SMS. Airtel and Vodafone Idea’s Rs 2398 and Rs 2399 annual plans, on the other hand, offer 1.5GB per day data along with unlimited voice and SMS